Exhibit 10.4
RELEASE AND SETTLEMENT AGREEMENT
THIS
RELEASE AND SETTLEMENT AGREEMENT (this
“Agreement”) is entered into by and between JUDY
M. ROBINETT, an individual (“Robinett”) and
MEDICAL DISCOVERIES, INC., a Utah corporation (hereinafter
referred to as “MDI”) on the following
premises:
Premises
A
. On
or about April 1, 2005, Robinett and MDI entered into an employment
agreement (the “Employment Agreement”).
B.
As
of March 31, 2007, under the terms of the Employment
Agreement, MDI owed Robinett approximately $1,851,804.93 in
accrued and unpaid compensation, un-accrued and pro-rata
bonuses, and severance pay.
C.
The
parties have raised issues respecting the amount due to
Robinett and MDI’s ability to pay such amount and desire
to reach an agreement resolving such issues in order to
facilitate anticipated financing for MDI. Accordingly,
Robinett has agreed to accept in settlement of the amount owed
a sum of $500,000.00, payable from proceeds from the sale of
certain Formestane assets owned by MDI (the “Formestane
Asset Sale”) to Eucodis, a third party.
D.
The
parties desire to enter into a full and complete release and
settlement with each other, compromising, resolving, and
settling all matters between them and buying
peace.
Agreement
NOW,
THEREFORE, upon these premises, which are incorporated herein
by reference, and for and in consideration of the mutual
promises and covenants set forth herein and other good and
valuable consideration, the receipt and adequacy of which are
hereby acknowledged, it is hereby agreed as
follows:
1.
Payment to Robinett .
MDI agrees to pay Robinett the sum of $500,000, following
MDI’s closing of the Formestane Asset Sale and its receipt of
the payment for such sale, subject to Robinett fulfilling the
“Ongoing Duties” set forth in Section 5 herein.
Robinett agrees that, with the exception of the payment described
in this Section 1 and the compensation payable pursuant to Sections
5 and 6 hereof, she will not be owed any amounts by MDI under the
Employment Agreement or otherwise for her services as an employee,
director or consultant of MDI through the date of her resignation
pursuant to Section 7, whether in the form of salary, bonus,
vacation pay, sick pay or any other compensation or benefits, and
MDI shall have no other obligation to provide or maintain any
compensation or benefits for MDI after the date of her deemed
resignation.
2.
Timely Disbursal of Funds .
In order to facilitate the timely transfer of funds on the closing
of the Formestane Asset Sale, including MDI’s receipt of at
least $2,000,000 in cash (the “Formestane Closing”),
Five Hundred Thousand dollars ($500,000.00) from the Formestane
Closing shall be held in the Emmes Group’s Client Trust
account, and shall be disbursed to Robinett upon the fulfillment of
the “Ongoing Duties” set forth in Section 5 herein.
Such disbursal shall be affected by wire transfer of funds to such
bank account or accounts as Robinette may specify to the Emmes
Group in writing. In order to implement the foregoing,
contemporaneously with the execution of this Agreement the parties
shall execute and deliver to the Emmes Group the parties’
irrevocable disbursal instructions in the form attached hereto as
Exhibit A and incorporated herein by reference.
3.
Waiver of 2007 Bonus .
Robinett waives any pro rata 2007 bonus, otherwise granted at the
discretion of MDI’s Board of Directors.
4.
Stock Options .
Robinett shall retain her previously granted incentive stock
options to purchase two million (2,000,000) shares of MDI common
stock (the “Retained Options”) (subject to stock
splits, stock dividends, and similar pro rata adjustments). The
Retained Options shall continue to have the same terms and
conditions as currently in existence, including an option price of
$0.01 per share, and the 5:00PM Pacific Time, December 31, 2012
expiration date. All other incentive stock options awarded Robinett
during her tenure with MDI shall be cancelled.
5.
Ongoing Duties .
Robinett shall continue to act as Chief Executive Officer of MDI at
an annual salary of $250,000 per year for a period commencing April
1, 2007, and terminating upon the completion of MDI’s
financial audit and the completion, signing, and filing of the
officer certifications to be attached as exhibits to the Form
10-KSB for 2006 and the Forms 10-QSB for 2007. During such period,
and provided MDI receives interim enabling financing,
Robinett’s primary responsibilities shall include using her
commercially reasonable best efforts to:
(a)
Cause
MDI to file all delinquent periodic reports required to be
filed by it pursuant to sections 13 or 15(d) under the
Securities Exchange Act of 1934;
(b)
Manage
MDI’s 2006 audit, which duties include
completing,
signing, and filing the officer certifications to be attached
as exhibits to the Form 10-KSB for 2006 and the Forms 10-QSB
for 2007 ;
(c)
Complete
the sale of the Formestane asset to Eucodis Pharmaceuticals
Forschungs - und Entwicklungs GmbH;
(d)
Manage,
provide support, or personally conduct negotiations with all
MDI creditors not transferred to Eucodis, with the objective
of achieving a level of reduction in the remaining debt of MDI
satisfactory to MDI’s Chairman of the board of
directors;
(e)
Seek
and obtain written approval from the Chairman of the MDI Board
prior to the release and payment of any MDI funds;
and,
(f)
Coordinate
the delivery of all MDI company records to a location directed
by the Chairman of the MDI Board.
6.
Sale of MDI-P Asset .
MDI shall pay Robinett 15% of all consideration passing to MDI for
the sale or transfer of MDI’s MDI-P asset in cash or in kind,
payable if, as and when received.
7.
Robinett’s Resignation .
Upon the completion of MDI’s financial audit, and the
completion, signing, and filing of the officer certifications to be
attached as exhibits to the Form 10-KSB for 2006 and the last of
the Forms 10-QSB for 2007, Robinett shall automatically be deemed
to have resigned as an officer, director, and employee of
MDI.
8.
Release of Claims and Waiver by Robinett .
Upon Robinett’s resignation as an officer, director and
employee of MDI and expressly subject thereto, Robinett, for
herself and for her present and former employees, agents,
attorneys, heirs, administrators, personal representatives,
successors, and assigns, shall be deemed to have irrevocably
released, remised, acquitted, and forever discharged and agreed to
indemnify MDI, including all of its future, present, and former
employees, agents, representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, managers, partners,
predecessors, successors and assigns, subsidiary and parent
entities, from any and all actions and causes of action, judgments,
execution, suits, debts, claims, demands, liabilities, obligations,
damages, and expenses of any and every character, known or unknown,
direct and/or indirect, at law or in equity, or whatsoever kind or
nature, arising prior to the date hereof, for or because of any
matter or things done, omitted, or suffered to be done by any of
the other parties prior to and including the date of execution
hereof, and in any way directly or indirectly arising out of or in
any way connected therewith, save and except only any obligation or
covenant arising under this Agreement. Robinett acknowledges that
the agreements in this paragraph are intended to be in full
satisfaction of any and all related injuries or damages arising
prior to the date hereof in connection with her relationship with
MDI.
9.
Release of Claims by MDI .
Except in the event of the discovery of fraud or other such willful
misconduct on the part of Robinett, upon Robinett’s
resignation as an officer, director and employee of MDI of MDI and
expressly subject thereto, MDI, for itself and its present and
former officers, shareholders, directors, managers, members,
employees, agents, attorneys, heirs, administrators, personal
representatives, successors, and assigns, shall be deemed to have
irrevocably released, remised, acquitted, and forever discharged,
and agreed to indemnify and hold harmless Robinett, together with
all of her future, present, and former agents, representatives,
consultants, attorneys, fiduciaries, servants, partners,
predecessors, successors, and assigns, from any and all actions and
causes of action, judgments, executions, suits, debts, claims,
demands, liabilities, obligations, damages, and expenses of any and
every character, known or unknown, direct and/or indirect, at law
or in equity, of whatsoever kind or nature arising prior to and as
of the date hereof, for or because of any matter or thing done,
omitted, or suffered to be done by any of the other parties prior
to and including the date of execution hereof, and in any way
directly or indirectly arising out of or in any way connected with
claims by or against Robinett, save and except only any obligation
or covenant arising under this Agreement. MDI acknowledges that the
agreements in this paragraph are intended to be in full
satisfaction of any and all related injuries or damages arising
prior to the date hereof in connection its relationship with
Robinett.
10.
Robinett Covenant Not To Sue .
Upon Robinett’s resignation as an officer, director and
employee of MDI and expressly subject thereto, Robinett hereby
covenants and agrees that she will not at any time, directly or
indirectly, initiate, maintain, or prosecute, or in any way
knowingly aid in the initiation, maintenance, or prosecution, of
any claim, demand, or cause of action, at law, in equity, or
otherwise, against MDI, including all of its future, present, and
former employees, agents, representatives, consultants, attorneys,
fiduciaries, servants, officers, directors, managers, partners,
predecessors, successors and assigns, subsidiary corporations and
companies, and parent corporations and companies for any claim,
damage, loss, or injury of any kind arising out of or in
an
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